Corporate Governance

In order to speed up its response to management conditions and achieve enhanced transparency in its management, Kubota has been committed to enhancing its corporate governance structure. Moreover, by building an internal control system and implementing steady improvements continuously during its business activities, Kubota not only enforces the observance of laws and regulations, but also reduces risk.

Corporate Governance Structure

Ensuring quick response to management conditions and improving management transparency

In order to speed up its response to management conditions and achieve enhanced transparency in its management, Kubota has adopted the following corporate governance structure.

Corporate Governance Structure (as of March 24, 2017)

Corporate Governance Structure (as of March 24, 2017)

Board of Directors

The Board of Directors makes strategic decisions and oversees the execution of duties by the Executive Officers. It consists of nine Directors (two of whom are Outside Directors). In addition to its regular monthly board meetings, it also meets as and when required to discuss and make decisions relating to management planning, financial planning, investment, business restructuring and other important management issues.

The Board of Directors holds a meeting once a year to report the results of risk management activities. This is done in order to verify that there are no inadequacies in the internal control system that could have a serious impact on corporate management with regard to the organization and operation of the management system for key risks identified by the Company.

Audit & Supervisory Board

Kubota is a company with an Audit & Supervisory Board, which oversees and audits the execution of duties by the Directors. It consists of four Audit & Supervisory Board Members (two of whom are Outside Audit & Supervisory Board Members).

In addition to its regular monthly Audit & Supervisory Board Meetings, it also meets as and when required to discuss and make decisions with regard to auditing policy, audit reports, and other matters.

Executive Officers' Meeting

Kubota adopts the Executive Officer System in order to strengthen on-site business execution at any location and make prompt and appropriate business decisions. The Executive Officers' Meeting consists of the President and Representative Director (referred to below as "the President") and 34 Executive Officers. In addition to its regular monthly meetings, it also meets as and when required. The President instructs the Executive Officers on policies and decisions made by the Board of Directors. The Executive Officers report to the President regarding the status of their execution of duties.

Management Committee and Investment Council

Kubota has a Management Committee and Investment Council in place in order to discuss and make decisions in regard to specific and important issues. The Management Committee meets to deliberate on important management matters such as investments, loans, and mid-term management plans before they are discussed by the Board of Directors. The Investment Council gives the President advice on matters to be decided by the President, except those deliberated by the Management Committee, as well as special matters.

Nomination Advisory Committee and Compensation Advisory Committee

Kubota has a Nomination Advisory Committee and a Compensation Advisory Committee in place, in which more than half of the members are Outside Directors, to give advice to the Board of Directors. The Nomination Advisory Committee and Compensation Advisory Committee meet to deliberate on nomination of candidates for the Directors, and compensation system and compensation level of the Directors over appropriate involvement and advice from the Outside Directors.

The Nomination Advisory Committee met once during the fiscal year for the purpose of discussing the election of newly selected candidates for the Board of Directors and the reappointment of existing Directors. The Compensation Advisory Committee met three times to revise the compensation system for Directors and Executive Officers and discussed the introduction of a system for compensation through the granting of shares of Kubota Corporation. (One of these meetings was for the approval of written resolutions.)

Policy for Appointing Outside Directors and Outside Audit & Supervisory Board Members

In selecting candidates for the positions of the Outside Directors and the Outside Audit & Supervisory Board Members, Kubota Corporation considers their experience outside Kubota Corporation, professional insights, and other qualifications, and recommends them to the General Meeting of Shareholders after approval by the Board of Directors.

Kubota established policies as to criteria for independency in electing them by reference to the rules for Independent Executives shareholders accordingly.

Reasons for Appointing Outside Directors (Independent Executives)

Kubota elects Yuzuru Matsudo as an Outside Director since Kubota wishes to receive his advice about general management based on his adequate experience and considerable insight in management which he acquired through his duties as a president of a listed company for a long time. Kubota has business relationship with Kyowa Hakko Kirin Co., Ltd., which he used to serve for, and Kato Memorial Bioscience Foundation, BANDAI Namco Holdings, Inc., and JSR Corporation, which he concurrently serves for. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there is no possibility for a conflict of interest with ordinary shareholders.

Kubota elects Koichi Ina as an Outside Director since Kubota wishes to receive his advice about general management based on his adequate experience and considerable insight in management which he acquired through his duties as a president, chairman, and plant and manufacturing manager in the motor vehicle industry. Kubota has no business relationship with Toyota Motor Corporation, which he used to serve for. Kubota has a business relationship with Daihatsu Motor Co., Ltd., where he concurrently serves for, but the amount arising from the above transactions for the year ended December 31, 2016 was less than 1% of the total consolidated revenues of the Company. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him and there is no possibility for a conflict of interest with ordinary shareholders.

Reasons for Appointing Outside Audit & Supervisory Board Members (Independent Executives)

Kubota elects Akira Morita as an Outside Audit & Supervisory Board member since Kubota wishes him to conduct audits from a broad-ranging and high-level perspective based on his adequate experience and considerable insight as a jurist. Kubota has no business relationship with Doshisha University and Miyake & Partners Law Firm, which he concurrently serves for. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there is no possibility for a conflict of interest with ordinary shareholders.

Kubota elects Teruo Suzuki as an Outside Audit & Supervisory Board Member since Kubota wishes him to conduct audits from a broad ranging and high-level perspective based on his adequate experience and considerable insight as a Certified Public Accountant (CPA) in corporate accounting and finance. Kubota has no business relationship with KPMG AZSA LLC, where he initially started his career as a CPA, and Seven-Eleven Japan Co., Ltd., which he concurrently serves for. Kubota has a business relationship with Kao Corporation, which he used to serve for, but the amount arising from the above transactions for the year ended December 31, 2016 was less than 1% of the total consolidated revenues of the company. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there is no possibility for a conflict of interest with ordinary shareholders.

Attendance rate of Outside Executives (Jan.-Dec. 2016)

Attendance rate of Outside Directors at Board of Directors' meetings Yuzuru Matsuda 100% Koichi Ina 83.3%
Attendance rate of Outside Audit & Supervisory Board Members at Audit & Supervisory Board meetings Akira Morita 100% Teruo Suzuki 100%

System supporting Audit & Supervisory Board Members

Kubota establishes the Office of Audit & Supervisory Board Members and assigns five employees (as of April 2017) to exclusively support the Audit & Supervisory Board Members in performing their duties.

Moreover, starting from January 2017, Kubota has assigned full-time Audit & Supervisory Board Members (three, as of April 2017) who are exclusively engaged in the auditing of subsidiaries, thereby enhancing the system supporting the Audit & Supervisory Board Members and reinforcing the Group's internal control.

Internal audit departments and Independent Auditors of Kubota report audit plans and the results of audits to the Audit & Supervisory Board Members periodically.

Compensation of Director and Audit & Supervisory Board Members

The compensation for the Directors is determined at the Meetings of the Board of Directors based on the deliberation at the Compensation Advisory Committee within the range of the maximum aggregate amounts of compensation approved at the General Meeting of Shareholders in consideration of operating results of the Company, compensation levels of other companies, and the wage levels of employees of Kubota. With the objectives of offering incentives to the Directors (excluding the Outside Directors, hereinafter the "Directors Covered by the Plan") to achieve sustained improvement of the corporate value of Kubota and share more of the value with its shareholders, a proposal of a new compensation plan for granting restricted stock to the Directors Covered by the Plan was resolved at the 127th Ordinary General Meeting of Shareholders held on March 24, 2017.

The compensation for the Audit & Supervisory Board Members is determined upon consultation among the Audit & Supervisory Board Members within the range of the maximum aggregate amounts of compensation approved at the General Meeting of Shareholders in consideration of the roles of the respective Audit & Supervisory Board Members.

Director and Auditor Compensation (Jan.–Dec. 2016)

Position Number of persons Total amount of compensation
(million yen)
Total amount by type
(million yen)
Basic remuneration Bonuses
Directors (excluding Outside Directors) 7 527 337 190
Audit & Supervisory Board Members (excluding Outside Audit & Supervisory Board Members) 2 68 68
Outside Executives (Outside Directors and Outside Audit & Supervisory Board Members) 5 62 62

Training for Executives

The Company holds executive forums related to CSR, human rights, safety, environment, quality and other subjects, and provides opportunities for acquiring and updating knowledge necessary for the supervision of operations. During the period from January to December 2016, a total of 140 executives participated in the forums. In overseas subsidiaries and affiliated companies, and at the regional offices in Japan, the Company holds Meetings of the Board of Directors, conducts inspections and engages in discussions with on-site executives (once or more a year each in Japan and overseas) in order to advance their understanding of the activities of these businesses and make appropriate management decisions.

Policy for Constructive Dialogue with Shareholders

The Company promotes constructive dialogue with shareholders and investors in order to sustain corporate growth and improve corporate value in mid-to to long-term. The policies for development of systems and operations for this activity are as follows:

(1) Basic policy
The Company holds briefings where the President and General Manager of Planning & Control Headquarters present the basic management policy, priority measures, and results of operation, with the aim of promoting constructive dialogue with domestic and foreign institutional investors. Furthermore, the Company promotes two-way communication, such as timely disclosure to all stakeholders including individual investors through active use of the Company website and executing questionnaire surveys.
(2) IR organizational structure
General Manager of Planning & Control Headquarters is in overall charge of directing and promoting IR. The department in charge of IR plays a central role in developing its IR activities through close coordination with each related department, such as Corporate Planning & Control Dept., Accounting Dept., Corporate Communication Dept., General Affairs Dept., Legal Dept. and other departments.
(3) Feedback to management
Subjects of dialogue with investors are reported back to the Board of Directors, the Executive Officers' Meeting, and relevant departments by the President and General Manager of Planning & Control Headquarters as necessary.
(4) Policy for insider information management when engaging in dialogue
Insider information, such as any undisclosed material facts, is not conveyed at the meetings with investors. The following section describes the structure and procedures regarding the timely disclosure of the Company information.
  1. Financial Information Disclosure Committee
    The Company has established the Financial Information Disclosure Committee so as to monitor and control financial information disclosure and, thereby, ensure its fairness, correctness, timeliness, and comprehensiveness. The committee consists of a committee chairperson, who is General Manager of the Planning & Control Headquarters; committee members, who are Deputy General Manager of CSR Planning & Coordination Headquarters, General Manager of Corporate Planning & Control Dept., General Manager of General Affairs Dept., General Manager of Corporate Communication Dept., General Manager of Accounting Dept., General Manager of Global Management Promotion Dept., and General Manager of Corporate Auditing Dept.; and observers, who are full-time Audit & Supervisory Board Members. The committee meets periodically in order to draft, report, and assess the Annual Securities Reports and the Quarterly Reports ("Shihanki Hokokusho") pursuant to the Financial Instruments and Exchange Act of Japan. And the committee also meets as necessary when there are material facts that must be disclosed immediately, such as momentous decisions and occurrence of significant events.
  2. Company regulations for information disclosure
    The Group has declared that "The Kubota Group makes appropriate and timely disclosure of corporate information and fulfills its responsibilities for transparency and accountability in corporate activities" in the "Kubota Group Charter for Action," and has prepared internal regulations entitled "Appropriate and Timely Disclosure of Corporate Information" and "Prohibition of Insider Trading" in the "Kubota Group Code of Conduct." The Company strives to put forward and ensure compliance with the "Kubota Group Code of Conduct" and prevention of insider trading before it occurs through education for various levels within the Company.

Directors, Audit & Supervisory Board Members and Executive Officers(as of March 24, 2017)

Directors

President and Representative Director
Masatoshi Kimata
Representative Director and Executive
Vice President
Toshihiro Kubo
Director and Senior Managing Executive Officer
  • Shigeru Kimura
  • Kenshiro Ogawa
  • Yuichi Kitao
  • Satoshi Iida
Director and Managing Executive Officer
  • Masato Yoshikawa
Outside Director
  • Yuzuru Matsuda
  • Koichi Ina

Audit & Supervisory Board Members

  • Toshikazu Fukuyama
  • Satoru Sakamoto
  • Akira Morita(Outside Audit & Supervisory Board Member)
  • Teruo Suzuki(Outside Audit & Supervisory Board Member)

Executive Officers

Senior Managing Executive Officer
Shinji Sasaki
Managing Executive Officers
  • Hiroshi Matsuki
  • Kunio Suwa
  • Toshihiko Kurosawa
  • Hiroshi Kawakami
  • Yoshiyuki Fujita
  • Hironobu Kubota
  • Kaoru Hamada
  • Yasuo Nakata
  • Kazuhiro Kimura
  • Dai Watanabe
  • Haruyuki Yoshida
Executive Officers
  • Junji Ogawa
  • Takao Shomura
  • Yuji Tomiyama
  • Kazunari
    Shimokawa
  • Mutsuo Uchida
  • Nobuyuki Ishii
  • Kazuhiro Shinabe
  • Ryuichi Minami
  • Yoshimitsu Ishibashi
  • Ryoji Kuroda
  • Yasuhiko Hiyama
  • Eiji Yoshioka
  • Yasukazu Kamada
  • Muneji Okamoto
  • Hiroto Kimura
  • Katsuhiko Yukawa

Members of the Board of Directors*Outside Directors

Photo:Koichi Ina , Masato Yoshikawa,Yuichi Kitao, Shigeru Kimura, Masatoshi Kimata, Toshihiro Kubo, Kenshiro Ogawa, Satoshi Iida, Yuzuru Matsuda

  • Koichi Ina *
  • Masato Yoshikawa
  • Yuichi Kitao
  • Shigeru Kimura
  • Masatoshi Kimata
  • Toshihiro Kubo
  • Kenshiro Ogawa
  • Satoshi Iida
  • Yuzuru Matsuda*

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